The Director of the National Economic Council said it is unfair for China to offer subsidies to auto plants in certain provinces because such sponsorship of automotive exports is suppressing manufacturing in the United States.

Gene Sperling, one of President Obama’s top advisers spoke at Carnegie Mellon University today about the direction of U.S. economic development. Sperling was a guest on WESA’s Essential Pittsburgh and discussed trade issues with China and deficit reduction.

The Obama Administration announced Sunday it is launching enforcement action at the World Trade Organization (WTO) because it says China is illegally subsidizing exports in their automobile and auto parts sectors.

Sperling said President Obama, in his State of the Union address, promised to put together a stronger administration capacity to go after trade issues.

“The previous administration was not aggressive in going after China for things that were hurting our manufacturing capacity,” said Sperling. “We lost five million manufacturing jobs in the last decade. And I think part of what President Obama’s been trying to do is not just win each individual case, but send a signal ‘This will not be tolerated anymore.”

He said the Obama administration is also requesting a WTO panel resolve a case made in July accusing China of imposing $3 billion in unfair tariffs in exports of U.S. cars.

“Obviously we’d always rather work things out quicker, in a cooperative way,” said Sperling. “But if we have to take them all the way through the WTO process and get a ruling and get a victory, as we have in several other WTO cases that we have brought, we stand prepared to do so and we expect to win these cases.”

Sperling also addressed the need to reduce the defecit. He said Mr. Obama has laid out a detailed plan that reduces the deficit $4 trillion, a number that’s been disputed recently. He said any reductions must be fair and balanced, cutting entitlements as well as taxing the wealthy more.

"A deficit reduction plan that’s done with a sledge hammer, across the board, will not only hurt vulnerable people in ways that go against our values, but you can end up cutting back on the very research, the very access to higher education, the very modernization of infrastructure which has been a hallmark of every generation in our country being willing to invest.”

He said cuts shouldn’t be so deep that the country falls into another recession like some European nations, and investments have to be made in higher education and research to secure America’s future.